{"id":6715,"date":"2026-06-11T04:01:55","date_gmt":"2026-06-11T04:01:55","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=6715"},"modified":"2026-06-11T04:01:55","modified_gmt":"2026-06-11T04:01:55","slug":"sas-jobs-crisis-what-a-decade-of-tax-data-tells-us","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=6715","title":{"rendered":"SA\u2019s jobs crisis: What a decade of tax data tells us"},"content":{"rendered":"

<\/p>\n

\n

It\u2019s time South Africa faced an honest question: what if the formal economy can\u2019t deliver the jobs needed?<\/p>\n

I am an economist who has been working closely with South Africa\u2019s administrative tax data over the past five years \u2013 arguably the best way to track progress in the formal sector.<\/p>\n

The sobering reality is that the country has gone backwards. And young people are bearing the brunt of the deterioration.<\/p>\n

\n

The scale of the jobs crisis is now so large that even decades of strong economic growth won\u2019t be enough to eliminate it.<\/p>\n<\/blockquote>\n

Looking at the last 10 years (2013\/14 to 2023\/24 tax years) of formal sector jobs data, as reported in the Spatial Tax Panel \u2013 a database constructed from employer-employee tax returns \u2013 South Africa managed to create only about 130 000 net new full-time equivalent work opportunities per year.<\/p>\n

This rate of job creation works out at just under 1% growth per annum, which isn\u2019t enough to keep pace with the country\u2019s growing population.<\/p>\n

Listen\/read:<\/p>\n

Can SA fix its \u2018Code 3\u2019 economy?<\/div>\n
Risenga Maluleke\u2019s insights on rising SA unemployment<\/div>\n
SA unemployment crisis needs \u2018war effort\u2019, not incremental reform<\/div>\n

The official statistics from the Quarterly Labour Force Survey confirm this.<\/p>\n

The number of unemployed job seekers in South Africa has risen from about eight million to almost 12 million between 2014 and 2024. The reported number of formal sector jobs is also around 12 million.<\/p>\n

What is perhaps more alarming is that even if formal sector employment were to grow at 3% per annum, it would still take more than 50 years to substantially reduce unemployment.<\/p>\n

The crisis of unemployment among youth is deepening<\/span><\/strong><\/p>\n

The problem is not only the pace of job creation, but also who is being left behind.<\/p>\n

\n

The next cohort of young job seekers is faring worse than ever, according to the latest tax data.<\/p>\n

\n
\n

ADVERTISEMENT<\/p>\n

CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n<\/blockquote>\n

The chart below shows how formal employment has shifted across age cohorts in cities, compared with the pre-Covid baseline. It\u2019s drawn from our recent report on the performance and economic outlook for South African cities.<\/p>\n

Percentage change in employment by age group across all metropolitan municipalities<\/strong><\/p>\n

\"\"<\/p>\n

Andrew Nell (2026) Chapter 9 \u2018The Impact of Covid-19 on Employment in South African Cities\u2019; Cities Economic Outlook 2026; Spatial Economic Activity Data South Africa.<\/p>\n<\/div>\n

The main message is that the pandemic had a dividing effect on labour market outcomes across younger and older workers.<\/p>\n

Workers aged 35 and above were surprisingly resilient to the shock. Numbers fell only slightly. They soon reached \u2013 and even surpassed \u2013 their pre-pandemic levels. It was younger age groups \u2013 either aged 15-25 or 25-35 \u2013 that faced the worst layoffs. The 15-25 cohort contracted by 5% and the 25-35 cohort by 15%.<\/p>\n

Neither of the younger age cohorts showed much sign of recovery. Job numbers levelled off much lower.<\/p>\n

Job creation has apparently shifted even further away from young people. This trend isn\u2019t unique to the tax data; a number of other studies confirm it.<\/p>\n

The limits of standard economic tools<\/span><\/strong><\/p>\n

What do mainstream economic theory and related empirical work have to say about addressing this crisis?<\/p>\n

The economist\u2019s toolbox is powerful when it comes to tweaking incentives, prices and market functioning around an existing equilibrium. The rise in data availability and computational power has also made analysis more precise and useful.<\/p>\n

But South Africa\u2019s unemployment crisis is not that kind of problem. It doesn\u2019t need just a small adjustment.<\/p>\n

When the required changes are large, the assumptions underpinning the models become less reliable. Attempting to move the dial on unemployment at the scale South Africa requires pushes us into guesswork.<\/p>\n

\n

South Africa is facing the prospect of multiple generations with little chance of finding employment. This calls for more than just policy tinkering.<\/p>\n

\n
\n

ADVERTISEMENT:<\/p>\n

CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n<\/blockquote>\n

The constraints of standard economic reasoning are illustrated in the debate over minimum wages and labour costs. In its simplest form, economic theory suggests that unemployment should all but disappear if you could be flexible about setting wages. Problem solved.<\/p>\n

The trouble is that empirical evidence about this is mixed. The employment tax incentive and sectoral minimum wage laws, intended to encourage hiring, showed little effect on employment.<\/p>\n

What if South Africa\u2019s market can\u2019t clear out surplus labour even at half the current wage level?<\/p>\n

This is further complicated by spatial constraints. For many poorer people, high transport costs mean they can\u2019t get to work even when low-wage jobs are available.<\/p>\n

Policy choices<\/span><\/strong><\/p>\n

There are other options.<\/p>\n

The informal economy is receiving growing policy attention. While I do not want to romanticise the precariousness of many micro and small enterprises, there is reason to believe that this sector could generate far more employment in the future.<\/p>\n

Read:<\/p>\n

Economic policy in SA neglects informal traders<\/div>\n
Four in five township businesses unregistered as economy nears R1trn<\/div>\n

According to the Quarterly Labour Force Survey, the informal economy already employs more workers than formal manufacturing.<\/p>\n

Another advantage of expanding informal sector employment is that it is often well matched to marginalised communities and places, including township economies, women, and black-owned enterprises.<\/p>\n

\n

Yet despite this potential, South Africa still does not have a coherent strategy for supporting small and informal businesses at scale.<\/p>\n<\/blockquote>\n

Another widely discussed option is some form of basic income grant.<\/p>\n

The appeal of this option is that the public sector already has the administrative capacity to do it. It has the blueprint in the Social Relief of Distress grant.<\/p>\n

Read:<\/p>\n

Future of SRD grant uncertain \u2013 National Treasury<\/div>\n
Basic income grant policy will take another year at least<\/div>\n

The main constraints are fiscal costs and the associated risks to public finances.<\/p>\n

\n
\n

ADVERTISEMENT:<\/p>\n

CONTINUE READING BELOW<\/p>\n<\/p><\/div>\n<\/div>\n

A further set of ideas relates to large-scale infrastructure-led stimulus. This might be complemented by a minimum employment guarantee, such as expanded community works or public employment programmes.<\/p>\n

It is likely that the answer lies in some combination of these approaches.<\/p>\n

Yet the fundamental challenge across all of them is the financial cost required to scale them to a point where they can make a meaningful difference. Would global financial markets punish South Africa for expanded public spending, or worse, would it destabilise the broader economy?<\/p>\n

I am sympathetic to the difficult balancing act the National Treasury faces.<\/p>\n

Taking some strategic bets<\/span><\/strong><\/p>\n

Does South Africa still need the formal sector to create millions of jobs?<\/p>\n

Without a doubt. But formal employment can\u2019t double in size overnight.<\/p>\n

Read:<\/p>\n

The tale of two economies: Lessons from the north<\/div>\n
SA unemployment is far worse than a bloodbath<\/div>\n

It is difficult to accept a future in which millions of South Africans who are willing and able to work go hungry while the country waits for the formal sector to grow.<\/p>\n

It is time to take some bold and strategic bets.<\/p>\n

This article was originally published by Econ3x3 under the headline, What if the formal economy can\u2019t deliver the jobs we need?<\/em>\"The<\/p>\n

Justin Visagie is Associate Professor at the Southern Centre for Inequality Studies at the University of the Witwatersrand.<\/em><\/p>\n

This article is republished from The Conversation under a Creative Commons licence. Read the original article.<\/em><\/p>\n<\/div>\n

#SAs #jobs #crisis #decade #tax #data #tells<\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s time South Africa faced an honest question: what if the formal economy can\u2019t deliver the jobs needed? I am an economist who has been working closely with South Africa\u2019s… <\/p>\n","protected":false},"author":1,"featured_media":6716,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[1065,343,104,430,681,227,4597],"class_list":["post-6715","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-crisis","tag-data","tag-decade","tag-jobs","tag-sas","tag-tax","tag-tells"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/6715","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6715"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/6715\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/6716"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6715"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6715"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6715"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}